Monday, March 3, 2014

Simberi posts net loss

SIMBERI’S performance in the March 2014 quarter has been hampered by delays in increasing output through the new processing circuit, St Barbara said.

The gold producer said this after it swung to a loss in its fiscal first-half amid a sharp slump in precious-metal prices and writedowns against its PNG and the Solomon Islands operations.

In its half-year report released to the stock market yesterday, the miner recorded a net loss of A$87.2 million (K190.51 million) in the six months through December, compared with a A$2.5 million (K5.46 million) profit in the year-earlier period.

It consequently didn’t offer shareholders a midyear payout.

The company said it had been forced to write down its mines further, citing weak gold prices and a “slower than anticipated improvement in operating performance”.

It reported impairment charges of A$42.1 million (K91.98 million) against its Simberi and Gold Ridge operations, acquired in its takeover of Allied Gold in 2012.

St Barbara had already announced writedowns of around A$220.9 million (K482.63 million) at the end of its fiscal year last June.

The Melbourne-based miner said all its permits for the Simberi operation were now in place to boost production to 3.5 million tonnes per annum.

Executive general manager Corporate services Ross Kennedy said additional mining fleet was being brought to site to increase mining performance and minor plant modifications were being undertaken to debottleneck the new grinding circuit.

In terms of cost reduction, Kennedy said the company was well advanced in aggressively implementing a wide range of cost cutting measures.

The strategic review at Gold Ridge(Solomon Islands) was ongoing and is primarily directed at reducing St Barbara Ltd’s funding of the project.

The review also included on-going metallurgical test work to optimise the design of a potentialrefractory circuit.